Indonesia’s Semen Gresik may cut cement exports

05 January 2005

Indonesia’s largest cement maker PT Semen Gresik may have to ask its units PT Semen Padang and PT Semen Tonasa to cut exports to anticipate increasing demand from the tsunami-hit Aceh province, a company official said. Semen Gresik’s Corporate Secretary Subagio told XFN-Asia that expectations of an increase in demand, especially from other cement makers outside Aceh, have been partly triggered by damage suffered by Aceh-based cement maker PT Semen Andalas, which has a cement manufacturing plant in Lhonga, some 25km from Banda Aceh. Subagio said, to meet growing demand from Aceh, Semen Gresik unit PT Semen Padang, which is located in West Sumatra, could redirect its sales to Aceh and also cut exports. ’We could also ask Semen Tonasa to cut exports, if Padang is unable to meet demand,’ he said, adding that Semen Padang could face capacity constraint to meet the demand.

Expectations that Semen Gresik will benefit from the reconstruction of Aceh have resulted in its share price gaining 21 pct since the tsunami struck. Semen Gresik cement sales during the first eleven months to November rose to 14.25Mt from 12.84Mt a year ago, with exports rising to 2.05Mt against 1.93Mt. Semen Padang’s exports accounted for 55 per cent of the group’s total export sales.